Let's Think

B-BBEE codes become a bureaucratic nightmare

The latest draft amended code for Broad-Based Black Economic Empowerment (B-BBEE) in the transport sector will create a bureaucratic nightmare in a 180º about-turn from the minibus industry’s troubled start in the 1980s.

Ironically, this about-turn in the taxi industry, one of the eight subsectors in the draft amended code published by Minister of Trade and Industry Rob Davies for comment last week, has at its core fundamentally the same motive that prevailed in the 1980s: to push a particular economic model.

In the early 1990s I, then a member of parliament, made an appointment with the then responsible minister, Dr Piet Welgemoed, who in 1979 headed a commission to probe the industry. At the time violent clashes between various kombi-taxi groups over routes were commonplace in townships.

Based on presentations from friends from among others Alexandra, immediately north of Johannesburg, I pleaded with the minister to introduce the licensing of, and some regulation of, the booming kombi-taxi sector. His reply was curt, flat “no”. It was an easy entrance into the modern economy for blacks and it should be left to the ‘market’ to sort out.

What we now have on the table from Dr Davies is a document of no less than 380 pages, 51 of which deal with the taxi subsector, that prescribes to the transport sector how it should run its affairs to comply with its B-BBEE code, and that alone.

In the document there are cross references to a myriad of other official documents and legislation. Just to come to grips with the implications of the document will take up many hours of careful study by a learned reader and master of a number of disciplines.

Some of the prescriptions for compliance also go way beyond mere goals for B-BBEE. For example, any “entity” involved in the taxi subsector is expected to, in line with the aim to break the “male stranglehold” on the sector, have in its ownership at least 25% of “voting rights” in the hands of women; at executive management level 55% of “all executive directors” have to be Black women and 30% “Black Youth”; and 2% have to be “black people … with disabilities as a percentage of all employees.”

The fact is that, under this model, there does not seem to be any consideration for the possibility that the person or entity that might have risked putting up 100% of the capital, may not be one of the designated groups. It would leave a maximum executive voting percentage of only 15% to such an individual or entity.

Throughout the draft code, special attention is given to the position of “people living with disabilities” as it seeks to “empower” them.

While the position of people with disabilities is a worthy cause, it is an open question, however, if it should the subject of seemingly arbitrary quotas in a B-BBEE code with a distinctly different and very specific mandate.

The subject of people living with disabilities, in a 2014 in-depth report of Stats SA, reveals an extremely complicated, multi-factored social issue surrounding the situation of South Africans living with disabilities that can hardly be addressed by a prescriptive and simplistic quota regime.

Instead of dumping a bureaucratic nightmare on economic sectors, which has more to do with his all-controlling ideological inclination as member of the South African Communist Party than promoting higher employment rates, Dr Davies should rather focus on getting the basics for economic growth in place.

After all, more than 25 years after Dr Welgemoed displayed a blind spot in the other direction, when releasing his “draft code” Dr Davies admitted that a “national register of taxis to inform decision-making and coordinate planning” is still not in place.